Foxwoods partnering with DraftKings
Foxwoods Resort Casino has signed a deal with DraftKings as the platform to host online sports betting pending any legalization in Connecticut. The deal also includes a collaboration in offering daily fantasy sports leagues that pay cash to winners with plans to launch Sunday, Dec. 13.
Boston-based DraftKings is one of two major outlets for daily fantasy sports betting along with FanDuel. Connecticut authorized daily fantasy sports in a 2017 budget bill, but has yet to set a clearly defined set of regulations for the sector after an opinion by the state’s attorney general’s office that daily fantasy sports could represent a violation of the state’s revenue agreement with Foxwoods and the Mohegan Sun casino.
After Massachusetts created its own regulations governing daily fantasy sports websites in 2016, DraftKings and FanDuel agreed to pay $1.3 million each as a settlement with the state. The companies agreed to strengthen consumer protections in line with the new rules in Massachusetts, including identifying “problem gamers” addicted to wagering and helping them find assistance.
Connecticut currently receives 25 cents of every dollar in slot revenue from Foxwoods and Mohegan Sun. Both casinos have been hit hard during the COVID-19 pandemic with a cascade effect on their respective employee bases.
Both DraftKings and FanDuel also run sports books that allow people to bet against game point spreads and outcomes for individual athletes, with DraftKings having expanded into apps for casino games like blackjack and roulette. DraftKings and Foxwoods are projecting $175 million in revenue for Connecticut from online gaming and sports betting in the first five years after legalization, if Gov. Ned Lamont and the General Assembly take steps to do so.
DraftKings members can bet on sports in a dozen states today, including New York and New Jersey, with varying restrictions in place. The Massachusetts State Senate rejected online gambling this past summer, with the MGM Springfield casino having emerged as a major regional rival to Mohegan Sun and Foxwoods.
“We’ve proven our ability to shape the future of gaming time and time again, and now we’re ready to drive sports wagering and online gaming for the state of Connecticut,” stated Rodney Butler, chairman of the Mashantucket Pequot Tribe which owns Foxwoods, in a written statement released Monday morning. “Working through the tribal gaming compacts, we will help bolster our economy with much-needed revenue and virtual entertainment.”
The governor’s office did not issue an immediate statement Monday morning, with Lamont having expressed support earlier this year for Foxwoods and Mohegan Sun being allowed to expand into sports betting.
DraftKings lost $578 million in the first nine months of 2020, due largely to a massive promotional campaign as it rolled out product launches in multiple states. In the past year, DraftKings has seen a 64 percent increase in users to more than a million monthly as of September. In the first nine months of this year, the company generated revenue of $41 on average each month from each member’s wagering of playing daily fantasy sports.
DraftKings CEO Jason Robins was scheduled to speak with investment analysts on Monday afternoon. In his most recent remarks in mid-November, Robins made no mention of any deal in the works with Foxwoods, which is the second largest casino in the United States after Oklahoma’s WinStar World Casino & Resort. The company announced a deal in September to be the daily fantasy sports engine for Bristolbased ESPN, a subsidiary of Walt Disney with Hearst Corp. owning a minority stake.
“We think there’s a great long-term relationship that we hope to build upon there,” Robins said in November in reference to the ESPN deal. “We don’t have at this time anything that we’re publicly saying about timing of any sort of direct integration or other things — but [our] teams are working very hard on it, so we hopefully will start to see some of the things very soon.”
State Sen. Cathy Osten, D-19, said she is preparing new online betting legislation that would have the state finalize regulations and formalize tax revenue from daily fantasy sports, with an eye on bolstering the prospects of Foxwoods and Mohegan Sun.
“The governor has allowed this activity to happen without any regulation,” Osten said Monday. “They are struggling and asking us to [help] them out in regard to approving this, where they will give the state more money. ... This would be a boon for these two large businesses that have given us closer to $9 billion now in the last 30 years.”